It's a buyer market right now, but it once was a balanced market and a boom market. But the same question can be asked no matter what market you are trading in, when it comes to property.
Should I renovate?
If so, how much and what should I do would most likely be the next big questions. But many home buyers forgot one thing to ask themselves.......
Is this my "forever" home
Is it a "temporary" home?
When I say temporary it is a short term purchase to try to flip betwee2-5 years to make some money (we are not talking about buying, renovating and flipping like the flip shows).
So you have purchased this slightly dated home and have GRAND PLANS to make it look amazing and are excited at the prospect. The challenge now is what I should do and what I should spend. So there are a couple of questions to ask yourself:-
First and foremost "what is your end goal?"
- Is it so I can turn the property over in a short time and make a small profit?
- Is it because I want to stay here for 2-5 years and want a nice place to live?
- OR is it because I am planning to stay here for 5+ years?
- How much do I have to spend?
- What should I spend
Home makeovers, renovating kitchens, renovating bathrooms or any type or property makeover, needs to be well planned and well throught out. Here are 3 key mistakes that home owners make when renovating or making over their home for sale:-
- They get emotionally attached to the style an the outcome - generally leading to ver-spending.
- They start the works before they have completed their budget and plans - leading to a project that over-runs in costs and times
- Believing that buyers need a certain style or product because they have been watching the amazing renovationg shows on TV.
Be warned all of these can lead to a home owner to over-capitalising, under sprucing up and blowing their budget.
Having a relationship with a real estate agent can be beneficial to you when you are renovating to flip or over a few years. They can provide guidance on where the UPPER LIMIT on your home is. What does this mean, how much can the market bear on the price of a home. It is not a simple equation:-
Renovations - $100,000
PLUS Costs $50,000 (stamp duty, selling fees etc)
The house may only even when fully renovation only ever sell for just shy of $500,000 and you won't make your money back, as you have broken the rule of renovations.
My guidance for budget spends are:-
- Renovations around 10-15% of home value
- Spruce Ups or home makeover 2-5%
Many opportunities are missed by purchasers when it comes to maximising their returns. When we talk about returns, if you spend a $dollar on the home you want to make your $dollar back and some more. Generally I would guide you to look at a 2 to 3 time return on your investment in renovating or makeovers.
So why not get professional help before you start out. Get a consultation from an expert on how you can improve the value of your home and also minimise your investment in either renovations for the kitchen, bathroom, back yard or simply do an amazing makeover for the home.
That simple consultation could save you $10,000 in mistakes and also make you $10,000 of value at sale.
Renovations are an investment decision.
The AIM when renovting for SALE is PROFIT.
Before you start do your research, review your options, don't start any works and KEEP IT SIMPLE
are my tips before you start renovating:-
- Do your research on your property value and market.
- Review all options for your renovations - not everything has to be brand new.
- Set a budget and stick to it.
- DIY'ers - if you can't do a good job then get a professional - it can de-value your efforts.
- Structural renovations may require council approval (i.e removal of walls) - always check.
In the end I always say KEEP IT SIMPLE. Simple will always get you more profit.